SCHEDULE 14A
(This filing replaces the 25-Sep-95, 08:00 accepted filing. Inadvertently,
the preliminary proxy statement box was checked off on the filing, versus
the definitive proxy statement box.)
(Rule 14a-1O1)
INFORMATlON REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant X
Filed by a party other than the registrant
Check the appropriate box:
Preliminary proxy statement
[ X ] Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SCI SYSTEMS, INC.
(Name of Registrant as Specified in Its Charter)
SCI SYSTEMS, INC.
(Name of Person(s) Filing Prox)' Statement)
Payment of filing fee (Check the appropriate box):
x $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-60)(2).
(DEPOSITED TO LOCK BOX AS UNRESTRICTED FUNDS)
$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i) (3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a) (2)and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
Set forth the amount on which the filing ree is calculated
and state bow it was determined.
<PAGE>
SCI SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 27, 1995
To the Shareholders of SCI Systems, Inc.:
Notice is hereby given that the 1995 annual meeting of shareholders of SCI
Systems, Inc., a Delaware corporation, will be held at 9:00 A.M., Eastern
Daylight Savings Time, on Friday, October 27, 1995, at The Ritz-Carlton Hotel
(Buckhead), 3434 Peachtree Street, N.E., Atlanta, Georgia 30326, for the
following purposes:
(1) to elect three Class II Directors to serve for a term of three years;
(2) to act upon a proposal to amend the Company's Second Restated Certificate of
Incorporation to increase the number of shares of the Company's authorized
Common Stock (par value $.10) from 50 million to 100 million;
(3) to act upon a proposal to ratify the selection of Ernst & Young LLP as
auditors for the fiscal year ending June 30, 1996; and
(4) to transact such other business as may properly come before the meeting and
any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on September 18,
1995 as the record date for the determination of shareholders entitled to notice
of and to vote at such meeting and any adjournment or postponement thereof.
It is important that your shares be represented and voted at the meeting.
Accordingly, you are requested to please date, sign, and mail the enclosed proxy
as promptly as possible. Thank you for your cooperation.
By order of the Board of Directors,
---------------------------------
Michael M. Sullivan
Secretary
Huntsville, Alabama
September 25, 1995
Please sign, date and promptly mail the enclosed white proxy card in the postage
paid envelope provided.
<PAGE>
SCI SYSTEMS, INC.
c/o SCI Systems (Alabama), Inc.
P.O. Box 1000
Huntsville, Alabama 35807
PROXY STATEMENT
This Statement is furnished in connection with the solicitation by the
Board of Directors of SCI Systems, Inc. (the "Board" and the "Company") of
proxies to be voted at the annual meeting of shareholders of the Company to be
held at 9:00 A.M., Eastern Daylight Savings Time, on Friday, October 27, 1995,
at The Ritz-Carlton Hotel (Buckhead), 3434 Peachtree Street, N.E., Atlanta,
Georgia 30326, and at any and all adjournments or postponements of such meeting
(the "Meeting"). If the enclosed form of proxy is executed, returned, and not
revoked, it will be voted in accordance with the specifications, if any, made by
the shareholders, and if specifications are not made, it will be voted for
election of the director nominees named herein, for approval of the Proposal to
amend the Company's Second Restated Certificate of Incorporation to increase the
number of shares of the Company's authorized Common Stock (par value $.10) (the
"Common Stock") from fifty million to 100 million, and for ratification of the
selection of auditors, as described in this Proxy Statement. If other matters
are properly presented at the Meeting, it is the intention of the persons
designated as proxies to vote on them in accordance with their best judgment.
Shareholders who execute proxies may revoke them at any time before they
are voted by filing with the Secretary of the Company either an instrument
revoking the proxy, or a duly executed proxy bearing a later date. Proxies also
may be revoked by any shareholder present at the Meeting who expresses a desire
to vote his or her shares in person. A majority of the shareholders entitled to
vote must be present in person, or represented by proxy, to constitute a quorum
and act upon the proposed business. Failure of a quorum to be represented at the
Meeting will necessitate adjournment and will subject the Company to additional
expense. When a quorum is present at any meeting, an affirmative vote of a
majority of the number of shares of stock present or represented by proxy at the
Meeting and entitled to vote shall decide any question brought before the
Meeting. However, directors shall be elected by an affirmative vote of a
plurality of the shares present in person or represented by proxy at the Meeting
and entitled to vote on the election of directors, and the proposed amendment to
the Company's Second Restated Certificate of Incorporation must be approved by
the holders of a majority of the number of shares outstanding and entitled to
vote on the proposed amendment. Abstentions will have the effect of negative
votes with respect to any matter presented at the Meeting, other than election
of directors, while broker non-votes will have no effect on any matter
presented. If authority to vote for one or more of the director nominees is
withheld on a proxy card, no vote will be cast with respect to the shares
indicated on that proxy card and the outcome of the election will not be
affected.
The Notice of the Meeting, this Proxy Statement, and the form of proxy were
first mailed to shareholders on or about September 25, 1995.
VOTING SECURITIES
At the close of business on September 18, 1995, the record date for
determining shareholders entitled to notice and to vote at the Meeting, there
were outstanding 29,505,595 shares of Common Stock of the Company. Each share is
entitled to one vote.
The following table sets forth certain information concerning each person
known to the Board to be a beneficial owner of more than five percent of the
outstanding shares of the Company's Common Stock as of December 31, 1994 (the
ownership of the Directors and executive officers of the Company being included
elsewhere herein).
Name and Address Amount Beneficially Percent of
of Beneficial Owner Owned Class (1)
- - ----------------------------------------------------------------------------
FMR Corporation 3,554,700 (1) 12.2%
82 Devonshire Street,
Boston, Massachusetts 02109-3614
State of Wisconsin Investment Board 1,933,000 (1) 6.6%
P.O. Box 7842, Madison, Wisconsin 53707
The Capital Group Companies, Inc. 1,586,490 (1) (2) 5.4%
333 South Hope Street,
Los Angeles, California 90071
(1) According to a Schedule 13G ("Schedule 13G"), filed pursuant to the
Securities Exchange Act of 1934 and dated February 11, 1994.
(2) Capital Research and Management Company, a registered investment adviser,
and an operating subsidiary of the Capital Group Companies, Inc., exercised
as of December 31,1994, investment discretion with respect to 1,586,490
shares which were owned by various institutional investors. Said subsidiary
has no power to direct the vote of the above shares.
<PAGE>
Ownership of Equity Securities in the Company
The following table sets forth information regarding beneficial ownership
of the Company's Common Stock of each director, the Named Executive Officers and
the directors and executive officers of the Company as a group as of September
18, 1995.
Aggegate Number of Shares Percentage of
Name Beneficially Owned Outstanding Shares
- - -------------------------------------------------------------------
Olin B. King 1,176,038 (1) 4.0
A. Eugene Sapp, Jr. 226,551 (1) *
Howard H. Callaway 77,000 (3) *
Jerry F. Thomas 47,576 (2) *
David F. Jenkins 38,516 (4) *
Peter M. Scheffler 27,342 (2) *
G. Robert Tod 3,520 (1) *
William E. Fruhan 3,500 (1) *
Jackie M. Ward 2,585 (1) *
Joseph C. Moquin 1,000 (1) *
Wayne Shortridge 1,000 (1) *
All Directors and Executive
Officers as a group (15 persons) 1,734,625 (5) 5.9
* Indicates less than 1% of issued and outstanding shares of Common Stock of
the Company.
(1) Includes 210,900 and 157,200 shares not presently owned by Messrs. King and
Sapp, respectively, but which are subject to stock options exercisable
within 60 days after September 18, 1995.
(2) Includes 46,025 and 7,200 shares not presently owned by Messrs. Thomas and
Scheffler but which are subject to stock options exercisable within 60 days
after September 18, 1995.
(3) Includes 1,500 shares owned by Mr. Callaway's spouse and 15,500 shares
owned of record by the Howard H. Callaway Foundation, Inc. Mr. Callaway is
an officer and Trustee of the Foundation and, as such, shares voting and
investment powers with respect to the shares owned by the Foundation.
Nothing in this paragraph should be construed as an admission by Mr.
Callaway of beneficial ownership of the shares owned by his spouse.
(4) Shares indicated are shares subject to stock options exercisable within 60
days after September 18, 1995.
(5) Includes 601,772 shares not presently owned but which are subject to stock
options exercisable within 60 days after September 18, 1995.
PROPOSAL 1 - ELECTION OF DIRECTORS
Nominees for Board of Directors
In accordance with the Company's Second and Restated Certificate of
Incorporation, the Board is divided into three classes, with each class
consisting, as nearly as possible, of one third of the total number of directors
fixed by the Board. The Company's Bylaws provide that the number of directors
shall be not less than three (3) and not more than eleven (11), and that the
exact size of the Board may be fixed from time to time by the Board. The Board
has fixed the number of directors at eight, with two directors in Class I, three
in Class II, and three in Class III. Board members serve three-year terms. The
terms are staggered to provide for election of one class each year. Class II
directors are to be elected at the Meeting.
The Board has nominated Jackie M. Ward, Wayne Shortridge and William E.
Fruhan for re-election as Class II directors. It is intended that the proxies
will be voted for the re-election of the three nominees to serve as directors of
the Company for a term of three years and until their respective successors are
elected and qualified. The proxies cannot be voted for a greater number of
persons than the number of nominees named herein. In the event any of the
nominees refuses or is unable to serve as a director (which is not now
anticipated), the person(s) acting as proxies reserve full discretion to vote
for such other persons as may be nominated.
<PAGE>
Information About Director Nominees and Continuing Directors
Based upon information supplied by them, the table below sets forth for
each director nominee and continuing director their name, age, positions with
the Company, principal occupation, and business experience for the last five
years, and prior service as a director of the Company.
Positions with the Company Director
Name and Age and Principal Occupation Since
- - -------------------------------------------------------------------------------
Class II Directors
(Term expiring in 1998)
- - ----------------------
Jackie M. Ward (1) (2) Chief Executive Officer, 1992
(57) Computer Generation Incorporated,
Atlanta, Ga., a provider of turn-key
telecommunications systems products
and data processing services to U.S.
and International markets, 1968 to present.
Wayne Shortridge (1) (3) Partner, Paul, Hastings, Janofsky 1992
(57) & Walker, January 1994 to present;
Partner, Powell, Goldstein, Frazer
& Murphy, Atlanta, Ga., 1968 to January 1994.
William E. Fruhan (1) (3) The Thomas D. Casserly, Jr. 1992
(52) Professor of Business Administration,
Harvard University, Graduate School of Business,
Cambridge, Mass., 1979 to present.
Class III Director Nominees
(Term expiring in 1996)
- - ----------------------
G. Robert Tod (2) (3) President and Chief Operating Officer, 1981
(56) CML Group, Inc., Acton, Massachusetts,
a specialty marketing company, since 1969.
A. Eugene Sapp, Jr. (1) (4) President and Chief Operating Officer 1981
(59) of SCI Systems, Inc.
Joseph C. Moquin (2) (4) Retired; Chief Executive Officer, 1992
(71) Teledyne Brown Engineering, 1985 to 1990;
Interim President, University of Alabama
in Huntsville, September 1990 to July 1991.
Class I Director Nominees
(Term expiring in 1997)
- - ----------------------
Olin B. King (4) Chairman of the Board 1961
(61) and Chief Executive Officer
of SCI Systems, Inc.
Howard H. Callaway (2) (3) President, Crested Butte Mountain 1976
Resort, Inc.,
(68) Crested Butte, Colorado, 1976 a
resort complex, since 1979; CEO and
President, Callaway Garden Resort, Inc.,
a resort complex, since January 1994.
- - ---------------------------
(1) Member of the Investment Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee
(4) Member of the Executive Committee
Certain of the continuing directors and director nominees also serve as
directors of other publicly held companies as follows: Mr. Callaway, CML Group,
Inc.; Mr. King, Regions Financial Corporation; Mr. Sapp, Irvine Sensors Corp.
and VBand Corporation; Mr. Tod, EG&G, Inc. and CML Group, Inc.; Dr. Fruhan,
Prudential Institutional Fund; and Ms. Ward, TRIGON Blue Cross Blue Shield and
NationsBank Corporation.
Meetings and Committees
The Board has standing Executive, Investment, Compensation, and Audit
Committees. The Board does not have a standing Nominating Committee, as the
Executive Committee acts as such.
During the 1995 fiscal year the Board met four times; the Executive
Committee met five times; the Investment Committee met four times; the Audit
Committee met three times; and the Compensation Committee met twice.
Consisting entirely of outside directors, the Audit Committee is
responsible for reviewing the Company's financial statements, evaluating the
Company's internal financial controls and procedures, and coordinating and
approving the activities of the Company's auditors.
Consisting entirely of outside directors, the Compensation Committee is
responsible for setting compensation guidelines for executives of the Company,
establishing their salaries, reviewing and approving incentive compensation
plans and bonus awards, and reporting all of the foregoing to the outside
members of the Board for approval.
The Executive Committee functions with substantially all of the powers and
duties of the Board; however, this Committee does not have authority to approve
mergers, amend the Certificate of Incorporation or Bylaws, or dispose of
substantially all of the Company's assets. The Executive Committee also
functions as the nominating committee of the Company, and will consider proposed
directorship nominations if recommended by shareholders in writing to the
Secretary of the Company.
<PAGE>
The Investment Committee is responsible for reviewing and directing the
investment funds of the Company and of each employee benefit trust established
by the Company.
For fiscal 1995 the six outside directors were paid an annual fee of
$10,000 plus $750 per Board meeting attended and $375 per committee meeting
attended, except that, in addition to the annual fee and Board Meeting fee, Mr.
Moquin is paid $150 per hour for Executive Committee meetings and for other work
done for the Company as requested. In 1995 Mr. Moquin was paid $1,650 for
attendance at Executive Committee meetings only.
The following Directors elected to receive a portion of their 1995 annual
director's fees in stock options pursuant to the Company's 1994 Stock Option
Incentive Plan in the amounts shown: Mr. Callaway, 970 options; Mr. Tod, 242
options; and Ms. Ward, 485 options. No Director exercised stock options in 1995.
The Compensation Committee of the Board is reviewing additional alternatives to
allow Board members to tie their compensation even more closely to Company
performance.
The Board of Directors recommends a vote "FOR" the re-election of the director
nominees named above.
PROPOSAL 2-PROPOSAL TO AMEND SECOND RESTATED CERTIFICATE OF INCORPORATION
The Company's Second Restated Certificate of Incorporation presently
provides that the Company is authorized to issue 50,000,000 shares of Common
Stock and 500,000 shares of preferred stock, without par value. The Board of
Directors has recommended that the authorized Common Stock of the Company be
increased from 50,000,000 to 100,000,000 shares. The additional shares of Common
Stock for which authorization is sought would be a part of the Company's
existing class of Common Stock and, if and when issued, would have the same
rights and privileges as the shares of Common Stock now outstanding.
As of September 18, 1995, there were 29,505,595 shares of Common Stock
issued and outstanding and 29,683 shares of Common Stock held as treasury stock.
An aggregate of 2,229,600 shares are subject to issuance under the Company's
stock option plans.
The Board recommends the increase in authorized Common Stock to enable the
Company to have additional shares available for possible issuance in connection
with such general corporate purposes as stock splits and stock dividends, the
issuance of shares for cash to raise equity capital, conversions of convertible
securities, or in connection with business acquisitions or stock option plans or
other employee benefit plans which may be adopted in the future. The Board
believes that additional authorized Common Stock will give the Company greater
flexibility and may allow shares of Common Stock to be issued without the
expense and delay of a shareholders' meeting to authorize additional shares if
and when the need arises
If the proposed amendment is adopted, the Company would be permitted to
issue the authorized shares without further shareholder approval, except to the
extent otherwise required by law, by a securities exchange or association on
which the Common Stock is listed or quoted at the time, or by the Second
Restated Certificate of Incorporation. Shareholders do not have preemptive
rights to subscribe for or purchase additional shares of the Company's Common
Stock.
The Company has no current plans, agreements or arrangements for the
issuance of additional Common Stock, other than the purchase of shares pursuant
to its stock option plans. However, the additional authorized shares would be
available for issuance (subject to further shareholder approval only as noted
above) at such times and for such proper corporate purposes at the Board of
Directors may approve, including possible future financing and acquistion
transactions. Depending upon the nature and terms thereof, while the Board has
no present plans in this regard, such transactions could enable the Board to
render more difficult, or discourage an attempt, to obtain control of the
Company. For example, the issuance of shares of Common Stock in a public or
private sale, merger, or similar transaction would increase the number of the
Company's outstanding shares, thereby diluting the interest of a party seeking
to take over the Company. Furthermore, many companies have recently issued
warrants or other rights to acquire additional shares to holders of common stock
to discourage or defeat unsolicited stock accumulation programs and acquisition
proposals. If Proposal 2 is adopted, more Common Stock of the Company would be
available for such purposes than is currently available. Management currently
knows of no intent or plan on the part of any persons or entity to gain control
of the Company and Proposal 2 is not being recommended in response to any such
intent or plan.
If Proposal 2 is adopted, the Second Restated Certificate of Incorporation
of SCI Systems, Inc., as in force and effect on the date of this proxy statement
will be amended by deleting Section (a) of Article FOURTH in its entirety and by
substituting in lieu thereof the following:
"FOURTH. (a) The aggregate number of shares which the corporation
shall have the authority to issue is One Hun-dred Million
(100,000,000) shares of common stock of the par value of ten cents
($.10) per share (herinafter called the "Common Stock") and Five
Hundred Thousand (500,000) shares of preferred stock without par value
(herinafter called the "Preferred Stock"). At every meeting of the
stockholders, every holder of stock of the corporation, be it Common
Stock or Preferred Stock, shall be entitled to one vote, in person or
by proxy, for each share of Common Stock or Preferred Stock standing
in his name on the books of the corporation. The Common Stock and the
Preferred Stock shall vote together as one class unless otherwise
expressly required by law."
<PAGE>
The Board of Directors recommends a vote "FOR" the proposal to amend
Article FOURTH, section (a) of the Second Restated Certificate of Incorporation.
PROPOSAL 3-RATIFICATION OF SELECTION OF AUDITORS
Ernst & Young LLP has served as independent certified public accountant for
the Company since 1961 and has been selected by the Board of Directors to audit
the books and records of the Company for the fiscal year ending June 30, 1996.
If the shareholders do not ratify this selection, the selection of another firm
will be considered by the Board. The Audit Committee of the Board is of the
opinion that the retention of the services of Ernst & Young LLP is in the best
interests of the Company. A representative of the firm is expected to be present
at the Meeting to respond to appropriate questions and to make a statement if he
or she so desires.
The Board of Directors recommends a vote "FOR" ratification of Ernst & Young LLP
as Auditors for fiscal year 1996.
EXECUTIVE OFFICERS
Officers of the Company are elected by the Board annually and serve at the
pleasure of the Board. Information concerning certain of the executive officers
of the Company is contained in the following Summary Compensation Table and
other tables set forth in this Proxy Statement.
Messrs. Olin B. King and A. Eugene Sapp, Jr. are officers of SCI Systems,
Inc. and of one or more of its subsidiaries; all other executive officers are
officers of one or more Company subsidiaries.
Messrs. King and Sapp have held various positions with the Company since
1961 and 1962, respectively, and have been Chairman and CEO, and President and
COO, respectively, since prior to 1990.
Mr. Richard A. Holloway, age 53, joined the Company in April 1986 as Senior
Vice President, Government Division.
Mr. Jeffrey L. Nesbitt, age 44, joined the Company in 1985 as Plant Manager
and was promoted to Vice President in 1987 and to Senior Vice President,
Commercial Division, Eastern Region, in 1991.
Mr. David F. Jenkins, age 58, joined the Company in 1990 as Vice President
and was promoted to Senior Vice President, Commercial Division, Western Region,
in 1991. Prior to 1990 Mr. Jenkins served in several managerial positions with
the Unisys Corporation.
Mr. Alexander A.C. Wilson, age 58, joined the Company as Senior Vice
President, Commercial Division, European Region, in October 1993. From 1992 to
September 1993 Mr. Wilson served as Director, Personal Computer Manufacturing
and Distribution, International Business Machines Corporation. From 1978 through
1992 Mr. Wilson held increasingly responsible management postions with
International Business Machines Corporation.
Mr. Jerry F. Thomas, age 54, has held various positions with the Company
since 1963. In 1987 he was named Vice President, Government Division; in July
1992 he was named Vice President, Commercial Division, Central Region; and in
September 1993 he was promoted to Senior Vice President, Commercial Division,
Central Region.
Mr. Peter M. Scheffler, age 44, joined the Company as Senior Vice
President, Commercial Division, Asian Region, in January 1994. From June 1993 to
January 1994 Mr. Scheffler was Senior Director of Worldwide Manufacturing for
Apple Computer, Inc. From 1988 through June 1993 Mr. Scheffler held a variety of
management positions with Apple Computer, Inc.
EXECUTIVE COMPENSATION
SEC regulations require disclosure to shareholders of executive
compensation in prescribed formats. The required information is comprised of a
Summary Compensation Table, additional tables which provide further details of
stock options and similar forms of compensation, a report on executive
compensation from the Compensation Committee of the Board of Directors, and a
five year stock performance graph.
Compensation Summary
The following table summarizes for the last three completed fiscal years
the compensation of the Chief Executive Officer and the four most highly
compensated executive officers ("Named Executive Officers") of the Company whose
salary and bonus exceeded $100,000 for the year ended June 30, 1995.
<PAGE>
<TABLE>
<CAPTION>
<C> <C> <C> <C> <C> <C>
Summary Compensation Table
Annual Compensation
- - --------------------------------------------------------------------------------------------------------
Long Term
Compensation
------------
Name and Total Securities All Other
Principal Annual Underlying Compensation
Position Year Salary ($) Bonus ($) Compensation ($) Options (#) ($) (c)
- - -------------------------------------------------------------------------------------------------------
<S>
Olin B. King, ........ 1995 464,709 452,426(a) 917,135 40,000 16,596
Chairman & ........... 1994 399,573 211,613 611,186 40,000 14,385
CEO ................. 1993 348,694 265,590 614,28 30,000 12,553
A. Eugene Sapp, Jr., . 1995 358,309 294,077(a) 652,386 28,000 12,444
President & COO ...... 1994 308,800 137,548 446,348 28,000 11,117
1993 275,331 172,634 447,965 20,000 19,912
David F. Jenkins, .... 1995 182,282 153,791(a) 336,073 12,000 13,281
Senior Vice President, 1994 160,004 71,338 231,342 12,000 12,898
Commercial Division, . 1993 144,946 118,790 263,736 18,000 12,609
Western Region
Jerry F. Thomas, ..... 1995 161,371 105,833(a) 267,204 12,000 15,809
Senior Vice President, 1994 139,962 66,825 206,787 10,000 15,039
Commercial Division, . 1993 132,769 135,495 168,264 18,000 14,780
Central Region
Peter M. Scheffler, .. 1995 189,510 67,123(a) 256,633 18,000 76,049(d)
Senior Vice President, 1994 70,673(b) 22,479(b) 93,152 10,000 46,784(d)
Commercial Division
Asian Region
</TABLE>
(a) The 1995 bonus is a good faith estimate of the amount payable when final
calculations are completed and approved by the Board of Directors.
(b) Represents partial salary and bonus for the year Mr. Scheffler joined the
Company.
(c) Amounts represent the Company's contributions to the Company's 401(k) and
Deferred Compensation Plans, which Plans are available to all eligible
employees.
(d) Amounts represent contributions of $1,654 in 1995 to the Company's 401(k)
and Deferred Compensation Plans with the remainder representing foreign
living and car allowances.
Stock Option Grants in Last Fiscal Year
Prior to October 28, 1994, the Company granted stock options to executive
officers and other key employees pursuant to its Incentive Stock Option and
Non-Qualified Stock Option Plans, and after October 28, 1994 pursuant to its
1994 Stock Option Incentive Plan (the "1994 Plan"). The Company does not grant
Stock Appreciation Rights (SARs). The following table sets forth certain
information regarding stock options granted to the Named Executive Officers
during fiscal year 1995 under the 1994 Plan.
<TABLE>
<CAPTION>
<C> <C> <C> <C> <C> <C>
Individual Grants
- - ---------------------------------------------------------------
Potential Realizable
Number of Value at Assumed
Securities %of Total Annual Rates of Stock
Underlying Options Granted Price Appreciation for
Options Employees in Exercise or Expiration Option Term
Name Granted Fiscal Year Base Price Date 5%($) 10%($)
- - ------------------------------------------------------------------------------------------------
<S>
Olin B. King 40,000 16.00 18.88 10/28/04 474,815 1,203,276
A. Eugene Sapp, Jr 28,000 11.20 18.88 10/28/04 332,371 842,293
David F. Jenkins 12,000 4.80 18.88 10/28/04 142,443 360,983
Jerry F. Thomas 12,000 4.80 18.88 10/28/04 142,443 360,983
Peter M. Scheffler 8,000 3.20 18.88 10/28/04 94,963 240,655
</TABLE>
The assumed annual rates of appreciation of five and ten percent would result in
the price of the Company's stock increasing by $15.26 and $39.84, respectively,
at the end of the option term.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table summarizes options exercised during fiscal year 1995
and presents the value of unexercised options held by the Named Executive
Officers at fiscal year-end under all stock option Plans:
<TABLE>
<CAPTION>
<C> <C> <C> <C> <C> <C>
Number of
Securities
Underlying
Unexercised
Options Value of Unexercised
Shares at Fiscal In-the-Money Options
Acquired Value Year End (#) at Fiscal Year End($)
Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- - ---------------------------------------------------------------------------------------------------------
<S>
Olin B. King -0- -0- 257,450 74,000 4,192,269 612,250
A. Eugene Sapp, Jr -0- -0- 163,100 51,200 2,644,995 420,100
David F. Jenkins -0- -0- 28,950 21,800 418,650 178,725
Jerry F. Thomas -0- -0- 39,825 19,800 605,350 156,525
Peter M. Scheffler -0- -0- 5,600 12,400 40,800 85,700
</TABLE>
Supplemental Retirement Plan: The Company's Supplemental Retirement Plan ("SRP")
is a noncontributory, defined benefit pension plan which provides fixed benefits
to members upon their retirement, death or termination of employment after at
least 5 years of service with the Company or its subsidiaries. The SRP is
sponsored by SCI Systems (Alabama), Inc. ("SCI Alabama"), a wholly-owned
subsidiary of the Company.
<PAGE>
All employees of the Plan Sponsor and its participating affiliates are
eligible to participate in the SRP. The SRP provides for a benefit accrual each
year for up to 35 years equal to 1% of employee compensation in excess of
$10,000 and, as of January 1, 1989, 1/2% of the first $10,000. Employee
compensation covered by the SRP is the total compensation that would be subject
to Social Security taxes as actually paid to the employee during a calendar
year, but excluding supplemental compensation awards, subject to a limitation
beginning January 1, 1989. Compensation deferred by members under the Deferred
Compensation Plan is not included as part of the employee covered compensation
in the year of deferral.
Based on past years' compensation covered by the SRP, and assuming normal
retirement age and a 5.5% annual increase in covered compensation from calendar
year 1995 until retirement, estimated annual benefits payable upon retirement to
the Named Executive Officers include the following: Mr. King, $60,632; Mr. Sapp,
$54,331; Mr. Jenkins, $23,476; Mr. Thomas, $31,950 and for Mr. Scheffler,
$73,072. These estimated benefits are subject to Internal Revenue Code of 1986
(the "Code") 415 maximum benefit limitations. In addition, these benefits do not
reflect the maximum limitation on includable employee compensation under Code
401(a)(17) effective for plan years beginning in 1989. The maximum limitation in
1995 is $150,000, subject to cost of living increases as prescribed by the
Secretary of the Treasury.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors (the
"Committee") consists of four Directors who are neither employees nor officers
of the Company. The Committee reviews the Company's executive compensation
program and policies each year and determines the compensation of the officers.
The Committee recommendations of compensation for the Chief Executive Officer
and the other officers are reviewed with and approved by all the nonemployee
directors, who constitute a majority of the Board.
The Committee's overall policy regarding compensation of the Company's
officers is to provide generally competitive salary levels and compensation
incentives that attract and retain individuals of outstanding ability; that
recognize individual performance and the performance of the Company relative to
the performance of other companies of comparable size and quality; and that
support both the short-term and long-term goals of the Company.
The executive compensation program includes three elements which, taken
together, constitute a flexible and balanced method of establishing total
compensation for management. These elements are base salary, annual incentive
awards in the form of annual cash bonuses, and long-term incentive awards in the
form of stock option grants.
Base Salaries
The Committee annually reviews and establishes officer base salaries.
Individual salaries are determined by the Committee's assessment of the
individual's experience level, the scope and complexity of the position held,
and the salaries being paid for similar positions in the industry based upon the
Company's knowledge of competitive salaries in the marketplace.
Annual Incentive Program
The goal of the annual incentive, or bonus, program is to place a
significant portion of the officers' and senior managers' cash compensation at
risk to encourage and reward a continued high level of performance each year.
Individual incentive amounts are determined by the Committee generally based
upon profitability of the individual's business unit and his or her
organizational responsibility.
The CEO and COO do not participate in the same annual incentive program as
the other Company officers. Annual incentive compensation for Messrs. King,
Chairman and CEO, and Sapp, President and COO, are based upon Company profits
and have been set for several years at 1% and .65% of the Company's annual net
income, respectively.
Long-term Incentive Program
Stock options are the basis for the Company's long-term incentive program.
The Company's stock option grants generally are made at market value at the date
of grant and vest over a four year and a day period. This program links officer
compensation to long-term shareholder value and focuses management attention on
Company performance over a period longer than one year. Stock options are also
granted to encourage and facilitate personal stock ownership by the officers and
thus strengthen both their personal commitment to the Company and their longer
term perspective. The Committee's policy is to grant stock option awards
annually, based both on individual performance and the potential for the officer
to contribute to the future success of the Company.
The Committee believes that the three programs described above provide
compensation that is competitive with the levels paid by other major competitors
in the industry, effectively links officer and shareholder interests through
equity-based plans, and is structured to provide incentives that are consistent
with the long-term investment horizons which characterize the business in which
the Company is engaged. In this regard, the Committee draws shareholder
attention to the Total Annual Compensation for Messrs. King and Sapp, CEO and
COO, respectively, for fiscal years 1993, 1994, and 1995. Total Annual
Compensation for these officers decreased in fiscal year 1994 and increased in
fiscal year 1995, generally tracking the overall performance of the Company
during that period.
<PAGE>
Chief Executive Officer Compensation
In determining Mr. King's base salary, annual bonus and stock option grant
in fiscal year 1995, the Committee considered both the Company's overall
performance and Mr. King's individual performance by the same methods described
above for Company officer compensation. The Committee also considered
compensation granted to chief executive officers of other companies in similar
industries, as well as incentive for future performance.
The Compensation Committee believes that Mr. King's compensation as Chief
Executive Officer appropriately reflects his performance and, in turn, that of
the Company in fiscal year 1995. Company results and Mr. King's individual
performance in fiscal year 1995 were, in general, very good. The Company had
record revenues, record net income, record bookings and finished the year with
record order backlog.
The Committee does not believe that the compensation of any Company officer
is likely to exceed the $1 million threshold limit of Section 162(m) of the
Internal Revenue Code and has not yet sought to structure the performance-based
portion of any of its officers' compensation packages to comply with that
Section.
Submitted by the Compensation Committee of the Company's Board of
Directors:
Howard H. Callaway, Chairman Joseph C. Moquin
G. Robert Tod Jackie M. Ward
PERFORMANCE GRAPH
The following graph sets forth a comparison of the cumulative total
shareholder return to the Company's shareholders with that of the Dow Jones
Industrial Average ("DJIA") and the Computer Hardware Subsector of the Hambrecht
& Quist Technology Index ("H&Q Comp Hdw"). Total shareholder return was
determined by converting the closing price of a share of SCI Common Stock at the
beginning of the measurement period (June 30, 1990) to a base amount ($100.00).
Cumulative return for each subsequent quarter-end (assuming reinvestment of all
dividends into additional shares) was measured as a change from the closing
price at the beginning of the measurement period and plotted. The graph assumes
$100.00 was invested on June 30, 1990 in the Company's Common Stock ("SCIS"), in
the DJIA, and in the H&Q Comp Hdw companies.
Comparative Five-Year Total Returns
SCI Systems, Inc., Dow Jones Industrial Average and Hambrecht & Quist Computer
Hardware Subsector
(Normalized) Stock Performance Graph
[The following table sets forth data which was graphically represented on the
actual proxy statement.]
NORMALIZED PRICES
H&Q
SCIS DJIA HARDWARE
06/90 100 100 100
09/90 65 85 80
12/90 83 91 88
03/91 80 101 101
06/91 75 101 85
09/91 70 105 91
12/91 65 110 85
03/92 88 112 89
06/92 71 115 90
09/92 115 114 80
12/92 183 115 74
03/93 211 119 73
06/93 173 122 72
09/93 169 123 63
12/93 176 130 77
03/94 160 126 81
06/94 151 126 70
09/94 211 133 84
12/94 180 133 96
03/95 187 144 99
06/95 250 158 123
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors, and persons who own more than 10 percent of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC") and the
National Association of Securities Dealers, Inc. Officers, directors and greater
than 10 percent shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on transactions reported to the Company and review of the
copies of such forms and any amendments thereto furnished to the Company, or
written representations that no forms were required, the Company believes that
during the year ended June 30, 1995, all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10 percent beneficial
owners were met, except that Mr. Holloway was one month late in filing one form
with the SEC.
GENERAL
Any shareholder of the Company wishing to submit a proposal at the
Company's 1996 annual meeting of shareholders and desiring the proposal to be
considered for inclusion in the Company's proxy materials must provide a written
copy of the proposal to the management of the Company at its principal executive
office not later than May 28, 1996, and must otherwise comply with the rules of
the Securities and Exchange Commission relating to shareholder proposals.
The cost of preparing and mailing the proxies, accompanying notices and
Proxy Statements, and all costs in connection with solicitation of proxies will
be paid by the Company. In addition to solicitation by use of the mail, certain
directors, officers and regular employees of the Company may solicit the return
of proxies by telephone, telegram or other electronic methods, or personal
interview without additional compensation. The Company may request brokerage
houses and custodians, nominees and fiduciaries to forward soliciting material
to their principals, the beneficial owners of Common Stock of the Company, and
will reimburse them for their reasonable out-of-pocket expenses.
Management does not know of any other matters to be presented at the
Meeting for action by shareholders. However, if any other matters requiring a
vote of the shareholders arise at the Meeting, it is intended that votes will be
cast pursuant to the proxies with respect to such matters in accordance with the
best judgment of the persons acting under the proxies.
If you cannot be present in person, you are requested to please date, sign
and mail the enclosed proxy card promptly. An envelope has been provided for
that purpose. No postage is required if mailed in the U.S.
By Order of the Board of Directors,
-------------------------------------------
Michael M. Sullivan
Secretary
Huntsville, Alabama
September 25, 1995
SCI SYSTEMS, INC.
This Proxy is solicited on behalf of the Board of Directors of the Company
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders and Proxy Statement, each dated September 25, 1995, and does
hereby appoint Olin B. King and A. Eugene Sapp, Jr., and either of them, with
full power of substitution, as proxy or proxies of the undersigned to represent
the undersigned and to vote all shares of SCI Systems, Inc. Common Stock which
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders of SCI Systems, Inc. to be held at The Ritz-Carlton
Hotel (Buckhead), 3434 Peachtree Street, N.E., Atlanta, Georgia 30326, at 9:00
a.m., local time, on October 27, 1995, and at any adjournment or postponement
thereof, upon the following matters as specified:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ITS NOMINEES AND
THE FOLLOWING PROPOSALS.
1. Election of Class II Directors FOR all nominees listed below (except as
marked to the contrary below) WITHHOLD AUTHORITY to vote for all nominees listed
below
Jackie M. Ward Wayne Shortridge William E. Fruhan
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. Approval of Amendment of the Company's Second Restated Certificate of
Incorporation to increase the numbers of shares of the Company's authorized
Common Stock (par value $.10) from 50 million to 100 million.
FOR AGAINST ABSTAIN
<PAGE>
3. Ratification of the selection of Ernst & Young LLP as the Company's auditors
for the fiscal year ending June 30, 1996.
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote on such other
business as may properly come before the meeting or any adjournment or
postponement thereof. This Proxy may be revoked at any time prior to the voting
thereof.
(PLEASE SIGN AND DATE ON REVERSE SIDE)
start here
end here
PLEASE DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE
This Proxy, when properly executed, will be voted in accordance with the
directions given by the undersigned shareholder. If no direction is made, it
will be voted in favor of Proposals 1, 2, and 3 and will be voted on any
discretionary matters in accordance with the best judgment and discretion
of the Proxies.
Dated:, 1995
Signature
Additional Signature, if held jointly
<PAGE>
Please sign exactly as your name(s) appears hereon. If your shares are held
jointly, each shareholder named should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title as such. If the
signatory is a corporation, please sign the full corporate name by a duly
authorized officer.
DRH25,6,1
ALLOCATED SHARES VOTING INSTRUCTIONS TO TRUSTEE
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF SCI SYSTEMS, INC.
OCTOBER 27, 1995
THE TRUSTEE SOLICITS THESE VOTING INSTRUCTIONS FROM PLAN
PARTICIPANTS IN THE SCI STOCK PURCHASE PLAN
The undersigned Participant in the SCI Systems, Inc. Stock Purchase Plan
(the "Plan") hereby instructs Mellon Bank, N.A., as Trustee under the Plan
("Trustee"), to vote all shares of common stock of the Company allocated to the
account of the undersigned under the Plan ("Allocated Shares") in accordance
with the instructions on the reverse hereof, and to represent the undersigned at
the Annual Meeting of Shareholders of the Company to be held at The Ritz-Carlton
Hotel (Buckhead), 3434 Peachtree Street, N.E., Atlanta, Georgia 30326, at 9:00
a.m., local time, on October 27 1995, and at any adjournments or postponements
thereof, and to act in its discretion upon such other matters as may properly
come before the meeting or any adjournments or postponements thereof.
The submission of this voting instruction form, if properly executed, revokes
all prior voting instruction forms.
TO ASSURE THAT YOUR VOTING INSTRUCTIONS ARE FOLLOWED, THIS FORM MUST BE PROPERLY
COMPLETED, SIGNED AND RECEIVED BACK BY THE TRUSTEE BY THE CLOSE OF BUSINESS ON
OCTOBER 25, 1995. IF YOUR VOTING INSTRUCTIONS ARE NOT TIMELY RECEIVED, OR IF
THIS FORM IS SIGNED AND RECEIVED BY THE TRUSTEE ON TIME BUT YOU DO NOT INDICATE
YOUR VOTING PREFERENCES, THE TRUSTEE WILL NOT VOTE THE SHARES ALLOCATED TO YOUR
ACCOUNT. YOUR VOTING INSTRUCTIONS WILL NOT BE COUNTED, UNLESS YOU SIGN THIS FORM
EXACTLY AS YOUR NAME APPEARS ON IT.
For your information, the Board of Directors recommends a vote "FOR" Proposals
1, 2 and 3. The Trustee makes no recommendations with respect to your voting
decision.
YOUR ALLOCATED SHARES:
(Please specify your choice on each proposal, date, sign (all on the reverse
hereof) and return in the enclosed envelope.)
<PAGE>
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end here
1. Election of Class II Directors
FOR all nominees listed below (except as marked to be the
contrary below) WITHHOLD AUTHORITY to vote for all nominees
listed below
Jackie M. Ward Wayne Shortridge William E. Fruhan
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below)
2. Approval of Amendment to the Company's Second Restated Certificate of
Incorporation to increase the number of shares of the Company's authorized
Common Stock (par value $.10) from 50 million to 100 million.
FOR AGAINST ABSTAIN
3. Ratification of the selection of Ernst & Young LLP as the Company's auditors
for the fiscal year ending June 30, 1996.
FOR AGAINST ABSTAIN
4. In it's discretion the Trustee is authorized to vote on such other business
as may properly come before the meeting or any adjournment or postponement
thereof.This Proxy may be revoked by you at any time prior to the voting
thereof.
PLEASE DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENVELOPE
ENCLOSED
Dated:, 1995
Signature
<PAGE>
DRH25,6,1
<PAGE>
Notice to Participants in the SCI Systems, Inc. Stock Purchase Plan
DEAR PLAN PARTICIPANT:
We are sending this letter and the enclosed materials to you as Trustee of
the SCI Systems Stock Purchase Plan (the "Plan").
The Annual Meeting of Shareholders of SCI Systems, Inc. ("SCI") is
scheduled to be held on October 27, 1995. Enclosed are the 1995 Annual Report
and proxy materials which are being distributed in connection with SCI's Annual
Meeting. As the owner of SCI common stock through the Plan, you are entitled to
vote your shares on all proposals presented in Management's proxy
statement.
Enclosed is a BLUE voting instruction card which will enable you to vote
your shares. If you wish to direct the vote of your shares, mark the boxes on
the BLUE voting instruction card, then sign, date and mail the BLUE voting
instruction card in the return envelope provided. Please return the card to be
delivered no later than October 25, 1995. You are encouraged to read the
enclosed materials carefully and to exercise your right to vote. We make no
recommendation on how you should vote your shares. All instruction cards
received by us will remain confidential and not be disclosed to SCI or any
officer of SCI.
Please be aware that your shares will not be voted if you do not return the
BLUE voting instruction card; if your instruction card is not signed exactly as
your name appears on it; or if you return a properly signed instruction card but
no direction is given as to the vote of your shares.
Sincerely,
Mellon Bank, N.A.
September 25, 1995
<PAGE>
Notice to Participants in the SCI Systems, Inc. Savings Plan
and/or Deferred Compensation Plan
DEAR PLAN PARTICIPANT:
We are sending this letter and the enclosed materials to you as Trustee of
the SCI Systems Savings and Deferred Compensation Plans (the "Plans").
The Annual Meeting of Shareholders of SCI Systems, Inc. ("SCI") is
scheduled to be held on October 27, 1995. Enclosed for your information as owner
of SCI common stock through the Plans are the 1995 Annual Report and Proxy
Statement which are being distributed in connection with SCI's Annual Meeting.
Sincerely,
Mellon Bank, N.A.
September 25, 1995
<PAGE>
